Best Of The Buy-Rated Dividend Stocks: Top 3 Companies: EDR, DOC, VZ

These 3 dividend stocks are rated a Buy by TheStreet
By TheStreet Wire ,

TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.

While plenty of high-yield opportunities exist, investors must always consider the safety of their dividend and the total return potential of their investment. It is not uncommon for a struggling company to suspend high-yielding dividends which could subsequently result in precipitous share price declines.

TheStreet Ratings' stock rating model views dividends favorably, but not so much that other factors are disregarded. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to its stock's performance.

These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel — rather, use them as a starting point for your own research.

The following pages contain our analysis of 3 stocks with substantial yields, that ultimately, we have rated "Buy."

Education Realty

Dividend Yield: 4.10%

Education Realty

(NYSE:

EDR

) shares currently have a dividend yield of 4.10%.

EdR is a real estate investment trust. The firm invests in the real estate markets of United States. It invests collegiate housing communities. The firm develops, acquires, owns, and manages collegiate housing communities located near university campuses. The company has a P/E ratio of 29.68.

The average volume for Education Realty has been 374,100 shares per day over the past 30 days. Education Realty has a market cap of $1.7 billion and is part of the real estate industry. Shares are down 3% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Education Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, reasonable valuation levels and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • EDR's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 133.1% when compared to the same quarter one year prior, rising from -$8.81 million to $2.92 million.
  • EDUCATION REALTY TRUST INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EDUCATION REALTY TRUST INC increased its bottom line by earning $0.98 versus $0.15 in the prior year. For the next year, the market is expecting a contraction of 64.3% in earnings ($0.35 versus $0.98).

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Physicians Realty

Dividend Yield: 5.60%

Physicians Realty

(NYSE:

DOC

) shares currently have a dividend yield of 5.60%.

Physicians Realty Trust, a self-managed healthcare real estate company, focuses on the acquisition, development, ownership, and management of healthcare properties that are leased to physicians, hospitals, and healthcare delivery systems. The company has a P/E ratio of 266.33.

The average volume for Physicians Realty has been 684,600 shares per day over the past 30 days. Physicians Realty has a market cap of $1.1 billion and is part of the real estate industry. Shares are down 4% year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Physicians Realty

as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • DOC's very impressive revenue growth greatly exceeded the industry average of 6.2%. Since the same quarter one year prior, revenues leaped by 158.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 634.0% when compared to the same quarter one year prior, rising from -$0.56 million to $3.00 million.
  • Net operating cash flow has significantly increased by 196.78% to $12.74 million when compared to the same quarter last year. In addition, PHYSICIANS REALTY TR has also vastly surpassed the industry average cash flow growth rate of -72.17%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • PHYSICIANS REALTY TR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PHYSICIANS REALTY TR reported poor results of -$0.19 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$0.19).

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Verizon Communications

Dividend Yield: 4.80%

Verizon Communications

(NYSE:

VZ

) shares currently have a dividend yield of 4.80%.

Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company has a P/E ratio of 19.21.

The average volume for Verizon Communications has been 15,239,000 shares per day over the past 30 days. Verizon Communications has a market cap of $190.7 billion and is part of the telecommunications industry. Shares are unchanged year-to-date as of the close of trading on Monday.

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TheStreet Ratings rates

Verizon Communications

as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • VZ's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 9.3% when compared to the same quarter one year prior, going from $3,695.00 million to $4,038.00 million.
  • Net operating cash flow has increased to $9,520.00 million or 13.97% when compared to the same quarter last year. In addition, VERIZON COMMUNICATIONS INC has also modestly surpassed the industry average cash flow growth rate of 4.80%.
  • VERIZON COMMUNICATIONS INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC reported lower earnings of $2.51 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $2.51).
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 59.87%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 12.17% compares favorably to the industry average.

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